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MFC Outperforms Industry, Trades Near 52-Week High: Time to Buy?
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Key Takeaways
MFC is scaling up across Asia, where strong new business growth is a major contributor to earnings.
Manulife Financial is expanding Wealth and Asset Management, targeting Europe and the wider EMEA market.
MFC's strong capital, more than 100% free cash flow conversion and 10% 7-year dividend CAGR support payouts.
Manulife Financial Corporation (MFC - Free Report) closed at $33.76 on Tuesday, near its 52-week high of $38.72. This proximity underscores investor confidence. It has the ingredients for further price appreciation.
Shares of Manulife Financial are trading above the 200-day simple moving average (SMA) of $33.27, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Shares of Manulife Financial have gained 15.4% in the past year, outperforming the industry’s growth of 5.6% and the Finance sector return of 14.1%.
Manulife Financial has outperformed its peers, including Primerica, Inc. (PRI - Free Report) , Voya Financial, Inc. (VOYA - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) . Shares of RGA and VOYA have gained 10.1% and 1.8%, respectively, while PRI shares have lost 8.4% in the past year.
Image Source: Zacks Investment Research
With a capitalization of $56.59 billion, the average number of shares traded in the last three months was 2.3 million. The life insurer has a solid track record of beating earnings estimates in two of the past four quarters and missing in the other two, with an average surprise of 3.63%.
Average Target Price for MFC Suggests Upside
Based on short-term price targets offered by 12 analysts, the Zacks average price target is $40.82 per share. The average suggests a potential 22.2% upside from the last closing price.
Image Source: Zacks Investment Research
MFC’s Growth Projection Encourages
The Zacks Consensus Estimate for Manulife Financial’s 2026 earnings per share indicates a year-over-year increase of 8.9%. The estimate for 2027 earnings per share and revenues indicates an increase of 8.5% and 3.6%, respectively, from the corresponding 2026 estimates.
Optimist Analyst Sentiment on MFC
One of the two analysts covering the stock has raised estimates for 2026 and 2027 over the past 30 days. The Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 1.2% and 1.1%, respectively, in the past 30 days.
Manulife Financial’s Higher Return on Capital
Return on equity in the trailing 12 months was 16.4%, better than the industry average of 15.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Key Points to Note for MFC
Manulife is aggressively developing its business in Asia, which, in turn, is reaping solid operational results. Asia is a major contributor to the company’s earnings. New business growth in Asia has been aiding the company’s operational results. Thus, the insurer is continually scaling up its business across Asia. We believe MFC is well-positioned to benefit from continued business growth momentum, higher expected earnings on insurance contracts and higher expected investment earnings, with notable growth from the largest in-force business, Hong Kong and an expanding distribution network.
Manulife Financial is expanding its Wealth and Asset Management business and has identified Europe (and the wider EMEA market) as a significant growth area. It is making long-term investments in this region.
MFC has been accelerating growth in the highest-potential businesses. Its inorganic growth is impressive, as this life insurer prudently deploys capital in high-growth, less capital-intensive and higher-return businesses.
Banking on its sturdy capital position, MFC distributes wealth to shareholders through higher dividends and share buybacks. The company has increased its dividend at a seven-year CAGR of 10% and targets a 35-45% dividend payout over the medium term.
MFC is strengthening its balance sheet and thus targets a leverage ratio of 25%. Notably, its free cash flow conversion has remained more than 100% over the last few quarters, reflecting its solid earnings.
Conclusion
Manulife Financial is set to grow on solid Asia business, growing Wealth and Asset Management business, strong free cash flow conversion ratio and a solid capital position. A medium-term expense efficiency ratio target of less than 45%, banking on diligent expense management, should drive growth.
Consistent wealth distribution makes it an attractive pick for yield-seeking investors, and favorable ROE also poises MFC for growth. MFC also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
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MFC Outperforms Industry, Trades Near 52-Week High: Time to Buy?
Key Takeaways
Manulife Financial Corporation (MFC - Free Report) closed at $33.76 on Tuesday, near its 52-week high of $38.72. This proximity underscores investor confidence. It has the ingredients for further price appreciation.
Shares of Manulife Financial are trading above the 200-day simple moving average (SMA) of $33.27, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Shares of Manulife Financial have gained 15.4% in the past year, outperforming the industry’s growth of 5.6% and the Finance sector return of 14.1%.
Manulife Financial has outperformed its peers, including Primerica, Inc. (PRI - Free Report) , Voya Financial, Inc. (VOYA - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) . Shares of RGA and VOYA have gained 10.1% and 1.8%, respectively, while PRI shares have lost 8.4% in the past year.
Image Source: Zacks Investment Research
With a capitalization of $56.59 billion, the average number of shares traded in the last three months was 2.3 million.
The life insurer has a solid track record of beating earnings estimates in two of the past four quarters and missing in the other two, with an average surprise of 3.63%.
Average Target Price for MFC Suggests Upside
Based on short-term price targets offered by 12 analysts, the Zacks average price target is $40.82 per share. The average suggests a potential 22.2% upside from the last closing price.
Image Source: Zacks Investment Research
MFC’s Growth Projection Encourages
The Zacks Consensus Estimate for Manulife Financial’s 2026 earnings per share indicates a year-over-year increase of 8.9%. The estimate for 2027 earnings per share and revenues indicates an increase of 8.5% and 3.6%, respectively, from the corresponding 2026 estimates.
Optimist Analyst Sentiment on MFC
One of the two analysts covering the stock has raised estimates for 2026 and 2027 over the past 30 days. The Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 1.2% and 1.1%, respectively, in the past 30 days.
Manulife Financial’s Higher Return on Capital
Return on equity in the trailing 12 months was 16.4%, better than the industry average of 15.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Key Points to Note for MFC
Manulife is aggressively developing its business in Asia, which, in turn, is reaping solid operational results. Asia is a major contributor to the company’s earnings. New business growth in Asia has been aiding the company’s operational results. Thus, the insurer is continually scaling up its business across Asia. We believe MFC is well-positioned to benefit from continued business growth momentum, higher expected earnings on insurance contracts and higher expected investment earnings, with notable growth from the largest in-force business, Hong Kong and an expanding distribution network.
Manulife Financial is expanding its Wealth and Asset Management business and has identified Europe (and the wider EMEA market) as a significant growth area. It is making long-term investments in this region.
MFC has been accelerating growth in the highest-potential businesses. Its inorganic growth is impressive, as this life insurer prudently deploys capital in high-growth, less capital-intensive and higher-return businesses.
Banking on its sturdy capital position, MFC distributes wealth to shareholders through higher dividends and share buybacks. The company has increased its dividend at a seven-year CAGR of 10% and targets a 35-45% dividend payout over the medium term.
MFC is strengthening its balance sheet and thus targets a leverage ratio of 25%. Notably, its free cash flow conversion has remained more than 100% over the last few quarters, reflecting its solid earnings.
Conclusion
Manulife Financial is set to grow on solid Asia business, growing Wealth and Asset Management business, strong free cash flow conversion ratio and a solid capital position. A medium-term expense efficiency ratio target of less than 45%, banking on diligent expense management, should drive growth.
Consistent wealth distribution makes it an attractive pick for yield-seeking investors, and favorable ROE also poises MFC for growth. MFC also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Coupled with optimistic analyst sentiment and favorable growth estimates, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.